CPI report: Grocery prices rocketed up by 10% in past year
From meat to milk, grocery prices galloped higher, rising by 10% in the last 12 months, said the Labor Department on Tuesday. It was the biggest increase in food-at-home prices in 41 years, according to the monthly Consumer Price Index report.
Gasoline, housing, and food were the three largest contributors to inflation. Gasoline prices were up by 48%, food by 8.8%, and housing by 5%.
Food prices have risen at ever-faster rates each month since May 2021, when the rise was 2.2%. While the overall increase in food was 8.8% in March, the increase was 10% for groceries and 6.9% for food-away-from-home, a category spanning restaurant meals, carry-out food, and school cafeterias. The sub-index for meals at workplaces and schools fell by nearly 31%, “reflecting widespread free lunch programs,” said the report.
Inflation “is certainly increasing the difficulty low-income households have in buying food,” said Ellen Vollinger of the anti-hunger Food Research and Action Center. Policymakers should put money into nutrition programs, she said, such as waivers that allow schools to provide meals to all students for free or that help low-income parents buy food for school-age children during the summer. The school-meal waivers are scheduled to expire on June 30.
SNAP benefits are adjusted each October 1 to reflect changes in the cost of living over the past year. At present, the average benefit, including aid tied to the pandemic, is $240 per person per month. Enrollment was 41.4 million people at latest count.
“Fallout from Russia’s invasion was all over the ugly March CPI report,” said Mark Zandi, chief economist at Moody’s Analytics.
“Even higher year-over-year inflation is likely this spring,” said Zandi on social media. “But if the pandemic continues to fade and the worst of the impact of Russia’s invasion on commodity prices is at hand, inflation will moderate quickly later this year. Big ifs, but we are due a bit of good fortune.”
Grocery prices were up across the board, said the Bureau of Labor Statistics. “The food-at-home index rose 10.0% over the last 12 months, the largest 12-month increase since the period ending March 1981. The index for meats, poultry, fish, and eggs increased 13.7% over the last year as the index for beef rose 16.0%.”
The price of butter was up by 12.5%, milk by 13.3%, eggs by 11.2%, and breakfast cereal by 9.2%. Fresh fruit prices rose by 10.1% and lettuce by 12%. Roast coffee cost 11.7% more than in last March and salad dressing cost 13.9% more.
Americans spend 13.4¢ of the consumer dollar on food, second to the 32.7¢ spent on shelter. An attention-getter, gasoline amounts to 3.9% of consumer spending.
Although inflation surged, prices for some items, such as apparel and used cars, held steady or declined. And the “core” inflation rate, which strips out volatile prices such as food and fuel, slowed in March, rising by 0.3% compared with 0.5% in February.
The CPI report is available here.